Quake Missiles... Whats it for?

It can be used to make a ramp from steep cliffs and destroy terraformed walls.
That's mostly it.

It's not a very defensive missile, so to speak.

I would say the best use is when you build a launcher but terrain blocks your missiles. Like say a big hill is in the way. You can then terraform the hill until your nukes can get through.

Well, I've seen it used to put islands under water (or under lava).

Or you could just use jump-bots.

It makes anywhere bot passable.

It was designed to do 4 things:

1. Give the silo something else to do once you've cleared out everything in range. You might want to not reclaim it so you can keep a couple napalms on hand for any armies. So you can at least make siesmic missiles (which have 2x the range of all the others) and get some strategic advantage from the investment.
2. Detect cloaked units. It doesn't do this well (or at all) right now because of how cloak reveal-on-damage is implimented.
3. Counter terraform walls from a long distance away, especially on FFA maps. Terraform was used much more aggressively when it was implimented, to block-in superfusions, mohogeos, antinukes, and entire bases.
4. Offer a cheaper broad-area terraform option with more. Because terraform can do -anything-, it has to be fairly expensive. But since all this does is smooth, we can offer a strong terraform option at a discounted rate.